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The Alternative to Capitalism
If state capitalism is not socialism, what is? In other words,
if state ownership and management of production does
not amount to the abolition of capitalism but only to a
change in the institutional framework within which it operates, what would be the essential features of a society in
which capitalism had been abolished?
Although it is possible to imagine that capitalism
could be replaced by some new form of class society in
which some other method of exploitation would replace
the wages system, we shall concern ourselves here only
with the replacement of capitalism by a society from
which, to remain deliberately vague for the moment,
exploitation and privilege would be absent.
Since capitalism is a worldwide class society and
exchange economy, it is clear that the exploitation-less
alternative to capitalism would have to be a classless world
society without exchange.
No classes, no state, no frontiers
The basis of any society is the way its members are organised for the production of wealth. Where a section of society controls the use of the means of production, we can
speak of a class society. Control of the means of production by a class implies the exclusion of the rest of society
from such control, an exclusion which ultimately depends
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The Alternative to Capitalism
on the threatened or actual use of physical force. An institutionalised organ of coercion, or state, is thus a feature of
all class societies and historically first made its appearance
with the division of society into classes.
In all class societies, one section of the population
controls the use of the means of production. Another way
of putting this is that the members of this section or class
own the means of production, since to be in a position to
control the use of something is to own it, whether or not
this is accompanied by some legal title deed.
It follows that a classless society is one in which the
use of the means of production is controlled by all members of society on an equal basis, and not just by a section
of them to the exclusion of the rest. As James Burnham
put it:
For a society to be ‘classless’ would mean that
within society there would be no group (with
the exception, perhaps, of temporary delegate
bodies, freely elected by the community and
subject always to recall) which would exercise, as
a group, any special control over access to the
instruments of production; and no group
receiving, as a group, preferential treatment in
distribution. (Burnham, 1945, p. 55)
In a classless society every member is in a position to take
part, on equal terms with every other member, in deciding
how the means of production should be used. Every
member of society is socially equal, standing in exactly the
same relationship to the means of production as every
other member. Similarly, every member of society has
access to the fruits of production on an equal basis.
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Once the use of the means of production is under
the democratic control of all members of society, class
ownership has been abolished. The means of production
can still be said to belong to those who control and benefit
from their use, in this case to the whole population organ ised on a democratic basis, and so to be commonly owned
by them. Common ownership can be defined as:
A state of affairs in which no person is excluded
from the possibility of controlling, using and
managing the means of production, distribution
and consumption. Each member of society can
acquire the capacity, that is to say, has the opportunity to realise a variety of goals, for example,
to consume what they want, to use means of
production for the purposes of socially necessary or unnecessary work, to administer production and distribution, to plan to allocate
resources, and to make decisions about short
term and long term collective goals. Common
ownership, then, refers to every individuals
potential ability to benefit from the wealth of
society and to participate in its running.
(Bragard, 1981, p. 255 emphasis in the original)
Even so, to use the word ownership can be misleading in
that this does not fully bring out the fact that the transfer
to all members of society of the power to control the production of wealth makes the very concept of property
redundant. With common ownership no one is excluded
from the possibility of controlling or benefiting from the
use of the means of production, so that the concept of
property in the sense of exclusive possession is meaning31
The Alternative to Capitalism
less: no one is excluded, there are no non-owners.
We could invent some new term such as no-ownership and talk about the classless alternative society to capitalism being a no-ownership society, but the same idea can
be expressed without neologism if common ownership is
understood as being a social relationship and not a form
of property ownership. This social relationship equality
between human beings with regard to the control of the
use of the means of production can equally accurately be
described by the terms classless society and democratic
control as by common ownership since these three terms
are only different ways of describing it from different
angles. The use of the term common ownership to refer to
the basic social relationship of the alternative society to
capitalism is not to be taken to imply therefore that common ownership of the means of production could exist
without democratic control. Common ownership means
democratic control means a classless society.
When we refer to the society based on common ownership, generally we shall use the term socialism, though
we have no objection to others using the term communism
since for us these terms mean exactly the same and are
interchangeable. If we have opted for the term socialism
this is as a means of showing that we decisively reject the
Leninist insertion of some sort of transitional society,
wrongly called socialism, between capitalism and its classless alternative, generally called communism. For us socialism is communism, since both terms describe the society
which immediately follows the abolition of capitalism.
Common ownership is not to be confused with state
ownership, since an organ of coercion, or state, has no
place in socialism. A class society is a society with a state
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because sectional control over the means of production
and the exclusion of the rest of the population cannot be
asserted without coercion, and hence without a special
organ to exercise this coercion. On the other hand, a classless society is a stateless society because such an organ of
coercion becomes unnecessary as soon as all members of
society stand in the same relationship with regard to the
control of the use of the means of production. The exist ence of a state as an instrument of class political control
and coercion is quite incompatible with the existence of
the social relationship of common ownership. State ownership is a form of exclusive property ownership which
implies a social relationship which is totally different from
socialism.
As we saw, common ownership is a social relationship of equality and democracy which makes the concept
of property redundant because there are no longer any
excluded non-owners. State ownership, on the other hand,
presupposes the existence of a government machine, a
legal system, armed forces and the other features of an
institutionalised organ of coercion. State-owned means of
production belong to an institution which confronts the
members of society, coerces them and dominates them,
both as individuals and as a collectivity. Under state ownership the answer to the question who owns the means of
production? Is not everybody or nobody as with common
ownership; it is the state. In other words, when a state
owns the means of production, the members of society
remain non-owners, excluded from control. Both legally
and socially, the means of production belong not to them,
but to the state, which stands as an independent power
between them and the means of production.
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The Alternative to Capitalism
The state, however, is not an abstraction floating
above society and its members; it is a social institution,
and, as such, a group of human beings, a section of society, organised in a particular way. This is why, strictly
speaking, we should have written above that the state confronts most members of society and excludes most of
them from control of the means of production. For
wherever there is a state, there is always a group of human
beings who stand in a different relationship to it from
most members of society: not as the dominated, nor as the
excluded, but as the dominators and the excluders. Under
state ownership, this group controls the use of the means
of production to the exclusion of the other members of
society. In this sense, it owns the means of production,
whether or not this is formally and legally recognised.
Another reason why state ownership and socialism
are incompatible is that the state is a national institution
which exercises political control over a limited geographical area. Since capitalism is a world system, the complete
state ownership of the means of production within a given
political area cannot represent the abolition of capitalism,
even within that area. What it does mean, and this has
been one of the major themes of this book, is the establishment of some form of state capitalism whose internal
mode of operation is conditioned by the fact that it has to
compete in a world market context against other capitals.
Since today capitalism is worldwide, the society which
replaces capitalism can only be worldwide. The only socialism possible today is world socialism. No more than capitalism can socialism exist in one country. So the common
ownership of socialism is the common ownership of the
world, of its natural and industrial resources, by the whole
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of humanity. Socialism can only be a universal society in
which all that is in and on the earth has become the common heritage of all humankind, and in which the division
of the world into states has given way to a world without
frontiers but with a democratic world administration.
No exchange, no economy
Socialism, being based on the common ownership of the
means of production by all members of society, is not an
exchange economy. Production would no longer be carried
on for sale with a view to profit as under capitalism. In
fact, production would not be carried on for sale at all.
Production for sale would be a nonsense since common
ownership of the means of production means that what is
produced is commonly owned by society as soon as it is
produced. The question of selling just cannot arise
because, as an act of exchange, this could only take place
between separate owners. Yet separate owners of parts of
the social product are precisely what would not, and could
not exist in a society where the means of production were
owned in common.
However, socialism is more than just not an exchange
economy; it is not an economy at all, not even a planned
economy. Economics, or political economy as it was originally called, grew up as the study of the forces which
came into operation when capitalism, as a system of generalised commodity production, began to become the predominant mode of producing and distributing wealth. The
production of wealth under capitalism, instead of being a
direct interaction between human beings and nature, in
which humans change nature to provide themselves with
the useful things they need to live, becomes a process of
production of wealth in the form of exchange value.
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Under this system, production is governed by forces which
operate independently of human will and which impose
themselves as external, coercive laws when men and
women make decisions about the production and distribution of wealth. In other words, the social process of the
production and the distribution of wealth becomes under
capitalism an economy governed by economic laws and studied
by a special discipline, economics.
Socialism is not an economy, because, in re-establishing conscious human control over production, it would
restore to the social process of wealth production its original character of simply being a direct interaction between
human beings and nature. Wealth in socialism would be
produced directly as such, i.e. as useful articles needed for
human survival and enjoyment; resources and labour
would be allocated for this purpose by conscious decisions,
not through the operation of economic laws acting with
the same coercive force as laws of nature. Although their
effect is similar, the economic laws which come into operation in an exchange economy such as capitalism are not
natural laws, since they arise out of a specific set of social
relationships existing between human beings. By changing
these social relationships through bringing production
under conscious human control, socialism would abolish
these laws and so also the economy as the field of human
activity governed by their operation. Hence socialism
would make economics redundant.
What we are saying, in effect, is that the term
exchange economy is a tautology in that an economy only
comes into existence when wealth is produced for
exchange. It is now clear why the term planned economy is
unacceptable as a definition of socialism. Socialism is not
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the planned production of wealth as exchange value, nor
the planned production of commodities, nor the planned
accumulation of capital. That is what state capitalism aims
to be. Planning is indeed central to the idea of socialism,
but socialism is the planned (consciously coordinated) production of useful things to satisfy human needs precisely
instead of the production, planned or otherwise, of wealth
as exchange value, commodities and capital. In socialism
wealth would have simply a specific use value (which
would be different under different conditions and for different individuals and groups of individuals) but it would
not have any exchange, or economic, value.
Conventional academic economics in the West rejects
the definition of economics as the study of the forces
which comes into operation when wealth is produced to
be exchanged. But even on the alternative definition it
offers that economics is the study of the allocation of
scarce resources to meet some human needs1 - socialism
would not be an economy. For socialism presupposes that
productive resources (materials, instruments of production, sources of energy) and technological knowledge are
sufficient to allow the population of the world to produce
enough food, clothing, shelter and other useful things, to
satisfy all their material needs.
Conventional economics, while denying that the
1
This leads to the basic assumption which economic analysis makes
about the physical world. It is assumed that the fundamental feature
of the economic world, the feature which gives rise to economic
problems at all, is that goods are scarce. Very few things in the world,
with the exception of air, water and (in some countries) sunshine,
are available in unlimited amounts. It is because of scarcity that
goods have to be shared out among individuals. If scarcity did not
exist, then there would be no economic system and no economics
(Stonier and Hague, 1980, p. 3 emphasis in original).
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potential for such a state of abundance exists, nevertheless
admits that if it did this would mean the end, not only of
‘the economy’ as a system of allocating scarce resources
but also of goods having an economic value and price;
goods would simply become useful things produced for
human beings to take and use, while economics as the
study of the most rational way to employ scarce resources
would give way to the study of how best to use abundant
resources to produce free goods in the amounts required
to satisfy human needs.2 Significantly, the ideologists of
state capitalism take up a basically similar position: if
abundance existed, value, prices, money, markets and
wages could be abolished but, since abundance does not
yet exist and could not be brought into existence for some
considerable time, all these categories of capitalism must
continue.3
2
Abundance removes conflict over resource allocation since by
definition there is enough for everyone, and so there are no
mutually exclusive choices, no opportunity is forgone and there is
no opportunity-cost. The golden age, a communist steady-state
equilibrium, will have been reached. Gradual change, growth, will be
simple and painless. The task of planning becomes one of simple
routine; the role of economics is virtually eliminated. There is then
no reason for various individuals and groups to compete, to take
possession for their own use of what is freely available to all (Nove,
1983, p. 15). There would then be no economic goods, i.e., no goods
that are relatively scarce; and there would hardly be any need for a
study of economics or economizing. All goods would be free goods,
like pure air used to be (Samuelson, 1980, p. 17 emphases in
original).
3
Present productive forces are quite inadequate to provide the
whole of mankind with up-to-date comfort (Mandel, 1968, p. 610).
The necessity of a transition period follows precisely from the fact
that on the morrow of the abolition of capitalism, society is still living
in a situation of relative shortage of consumer goods . The allocation of
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